Capitalism Causes Human Happiness Essay Example

of mercantilism. According to Joseph Schumpeter, capitalistic systems ranks among the most successful economic systems and have succeeded in benefiting populations by raising their living standards. He observed that capitalism has the potential to create wealth by advancing to higher levels of productivity. Capitalism also promotes development by embracing technological sophistication (DaniRodrik 77).

Capitalism, according to Marx dates from the 16th century where it commenced as merchant capitalism among small urban workshops. During this period, several capitalistic production processes in social, cultural, technical and social conditions emerged. Capitalism grew in feudal agricultural systems, economic doctrines (mercantilism) and industrial dimensions.The feudal agricultural system shifted substantially during the 16th century in Europe. This followed the fall of manorial system where land began to be grabbed by fewer landlords with large estates. Workers were employed and became part of the expanding economy.

This system applied pressure on both the tenants and the landlords as it was inclined to making more profits. There was coercive power from the aristocracy on the peasants which encouraged them to adopt better options. Tenants were offered with incentives to enhance their methods with a view of flourishing in the competitive labor market. This is an economic doctrine that existed between the sixteenth and eighteenth centuries. The periodwas described by major geographic explorations of land, regions and continents by prominent merchants commonly from Europe and Low Countries. Mercantilism was therefore a system of trade. However, commodities involved in their trade for profits were largely produced through non-capitalistic production techniques.

Therefore, most scholars refer the period within which merchant capitalism and mercantilism prevailed as the genesis of modern capitalism. However, according to Karl Polanyi, the hallmark of capitalism

is associated with the establishment of generalized markets. He argues that it was not until 1834 that competitive labor market was adopted in England and therefore, industrial capitalism cannot have existed before that date. It has also been established that England adopted a large-scale integration tactic to this system during the era of Elizabeth (1558-1603). During this era, the European merchants realized lots of profits from buying and selling of merchandise as they were backed by the state controls and monopolies (Peter Glick 567).This new group of economic theorists existed in the mid-18th century and greatly challenged mercantilist doctrines.

For example, they confronted the belief held among the mercantilists that the world’s wealth is constant and that a state can only raise its wealth at the expense of other states. The industrialist replaced mercantilism by suppressing the traditional handcraft skills of journey men, guilds and artisans during the industrial revolution. Also during this time mechanization of agriculture was encouraged and marked the establishment of factory system of manufacturing. The system was characterized by distinct division of labor with and between production lines. The establishment of this mode of production eventually led to the domination of capitalism (Musacchio and Lazzarini788).

Free market economies,widely known as neoliberalism or fundamentalism, have exhibited dominance during the 1980s. This was achieved by combining optimism about what markets can achieve better results without government’s influence. However, most governments stood on the way of the markets rather than being indispensable to their functioning and ultimately were cut down to size. The role of governments was therefore seized and the governments forced to retreat in social protection, environmental protection and consumer protection. Free trade agreements

have shown to eliminate protectionist barriers that caused interference with a competitive market.

The national economies have therefore been integrated and globalized into free markets. However, the corporates usually benefit more from the new environment as compared to the countries. Free market capitalism is characterized by; free-price system, Supply and demand are allowed to reach their point of equilibrium, No government intervention and Productive enterprises are privately owned.

A social market economy is a free-market system where the government involvement and intervention in price formation and control is kept at minimum. Unlike in free, market economy, a social market economy encourages unemployment benefits as well as recognition of labor rights through national collective bargaining schemes. The government provides for moderate to extensive provision of social security. Social market is majorly based on private ownership of business.

Mixed economy. This is a market-based economy in which private ownership of the means of production are highly upheld. Mixed economy capitalistic markets are heavily bent towards one extreme. Although most capitalistic economies are classified as mixed economies, they are characterized by the dominance of private ownership.

Capitalism has a number of advantages. For example, the citizens in capitalistic states are able to own their property or business. That way, they are able to compete fairly, make profits and accumulate wealth. Capitalism also promotes law and order. For example, the government and other stakeholder maintain conducive environment for free trade. This is done through worker unions and schemes, courts, police officers and other law enforcement agencies and international agreements.

Bankruptcy protection in capitalistic economic systems is highly upheld. For example, there are laws defining the extent and scope of bankruptcy declarations on individuals, businessmen

and corporate bodies. For intellectual property such as patents and publications, copyright laws have been put in place in capitalistic states across the world. Copyright laws protect individuals and company from intellectual property theft such as plagiarism, unauthorized copy and duplication of materials. Banking institutions and insurance companies have been helpful in capitalistic states. They offer financial support, security and compensation in the event of loses. The banking regulations and insurances also ensure reductions of risks such as theft and fraud. Businessmen are able to trade freely access their capital anywhere across the globe.

Capitalism also allows citizens use their land in doing anything including agriculture and other investments. The rules regulating use of land are not stringent and therefore, high production can be achieved through diversified use of the land as a factor of production. Citizens are also able to produce whatever they please. Unlike in democratic societies where the use of land is regulated by the government, citizens in capitalistic nations are at liberty to plough their land, rent it or even lease it. The distribution of products and services is left to the hands of the citizens. One is able to sell or by in the deregulated market with minimal or no government intervention.

Farmers for example are at liberty of exporting their products to nations across the world. Due to the high competitive market environment, sellers produce goods of high quality which attract consumerism and hence more profits. The competitive environment benefits the society as sellers add value to their products. Often, innovation and creativity is promoted in the spirit of gaining competitive edge among sellers and producers. The creativity leads into development

of new products and improvement of the quality of the existing products. Due to high production, the sellers dispose their products at reasonably lower prices.

At the beginning of neoliberalism in 1980, the world had around 12 billionaires. The number has been shown to increase progressively, for example, by 1990 the number of billionaires had risen to 99 while by 2000, the number climbed to 322. This is a remarkable trend and it implies that poor populations are being oppressed at the expense of the rich. Today, the number of billionaires is about 1,011. The exponential growth indicates the prevailing inequality prevailing worldwide.

The politicians and political organizations limit competition in the market as they have control of demand, supply and price dynamics. For example, they are able to limit production output in order to hike the profits for their selfish and exploitative interests. They put control measures in virtually all areas of production in order to dictate the consumer on buying of goods and services.

In capitalistic economic systems, the consumer forms an integral position in the production of goods and services. For example, the parties involved including business men, private and corporate entities have to play around with the preferences of the consumer in order to maximize sales. Some companies and corporates have been known to greatly utilize advertisement of their products and services and use it as a tool for stimulating consumerism behavior among the consumers (Carsel, Wilfred 516).

A capitalistic government has been a contagious issue in theory and in political movements. For example, the 19th century universal adult male suffrage in Britain took place alongside the advancement of industrial capitalism and therefore democracy became

wide spread leading capitalists to harbor a casual or mutual relationship between them. Nevertheless, during the 20th century, capitalism was accompanied by a variety of political formations and it became distinct from liberal democracies such as absolute monarchies, fascist regimes and single-party states.

According to democratic peace theory, democracies rarely fight other democracies due to political stability and similarities (Musacchio and Lazzarini 790). Although the capitalistic economic growth has led to democracy in the past, it may not show the same results in future. This is because authoritarian regimes are able to manage economic growth without having to get influence from political freedom.

Some researchers argue that most states dominated by capitalistic economic systems thrive under oppressive and authoritarian political regimes. The main example is Singapore which attracts a great deal of foreign investment due to its open market economy. However, the state is unable to protect civil liberties including freedom of speech and expression. The capitalistic republic of China has recorded high economic growth although with an authoritarian government.

In Chile, Augusto Pinochet’s reign led to high economic growth but triggered high levels of inequality. This is because of the use of authoritarian approaches to create a platform for investment and capitalism. Some analysts also argue that equality is inevitable in capitalistic economies and is a consequence of economic growth. The resulting concentration of wealth in such an economy often destabilizes democratic societies while undermining ideologies of social justice upon which they are erected. Capitalism is therefore incompatible with democracy as capitalism involves dictatorship while democracy involves rule by the people (Carsel, Wilfred 518).

Market deregulation is characterized by free trade agreements. Free trade agreements are intended to

eradicate market competition constraints. It is known to create trade blocs where the involved countries remove tariffs, quotas and preferences on goods and services traded with them. Most countries choose the approach to economic integration especially if their economic structures are regarded as complementary. For example, the US is a signatory to free trade agreements including The U.S-South African Customs Union Regional Free Trade Agreement, 1999 and the central American Regional Free trade Agreement, 2005. The U.S has also initiated bilateral Free Trade Agreements with nations such as; Chile, Jordan, Singapore, Australia, Malaysia, Colombia, Morocco, Panama and Peru. Clearly, most of these agreements were initiated during George Bush’s reign and targeted countries which either lack or fail to enforce worker’s rights laws. Notably, labor unions are seen by neoliberalism as constraints on competition and profits.

Although free trade agreements have been cited as stimulus to growth, reduction of poverty, promotion of promotion of efficiency, they are oppressive as they don’t consider the rights of workers. Critics also point out that free trade agreements lead into job losses in the U.S due to labor outsourcing. It is also responsible for environmental degradation, increased risk of economic bubbles, and cultural homogenization (Mayfield 99).

The prices of products are determined by the balance between supply and demand. This leads into market equilibrium. For example, a rise in demand usually results into increased prices and output. That is, prices rise when demand surpasses supply and falls when supply surpasses demand. The market therefore co-ordinates itself by reaching new equilibrium price and quantity. A capitalistic state is dominated by free-market where there is minimal or no regulation over pricing mechanisms. However, in

democratic economies which are universal today, markets are regulated by the government in order to promote social welfare, fund defense and public safety, conserve natural resources, correct market failure, among other reasons.

In capitalistic economies, markets are not much relied upon rather the state relies heavily on state-owned enterprises and indirect economic planning to accumulate capital. Competition results when producers decide to sale similar or same product to the same buyers. According to capitalists, competition leads to more affordable prices and innovation. This is because without competition, cartels and monopolies usually develop and dominate (Musacchio and Lazzarini 860).

This clearly shows that in capitalistic economic states, the government’s involvement is minimal as compared to democratic ones. For example, the government is involved only in protecting citizens, protecting the constitution and bill of rights which consequently protect individual rights, setting laws, legal systems and criminal punishment. The police officers are tasked with enforcing the enacted laws concerning trade while court systems are tasked with prosecuting the laws.

The main countries which practice capitalism as their economic system include: the United States, United Kingdom, Canada, Hong Kong and Japan. To begin with, the United States has formed ties for free market and trade with countries such as china, Morocco, Peru, Singapore and panama. The trade is controlled by the business men and corporations where they determine supply and demand. Countries such as china has also formed tie with African countries where Chine nationalities explore the African countries purposely to exploit it oil, wood, copper and other natural resources. Workers from Hong Kong, japan and Canada are able to trade freely with the Americans as they are able to import cheap

American products. In the United Kingdom, capitalism dates 1800 BC when goods such as silks and spices were traded and were available after the crusaders. To date, the UK trades freely with most of the world’s countries. It has invested in industry, agriculture, human resource across the globe(DaniRodrik 77).

There is unrestrained capital movement in capitalistic economic systems which are manifested in form of financial instability and migration of workers. The integration of global capital markets have led into global flows of foreign direct investments. Since capital becomes more mobile due to the search of favorable and greater profit making conditions, employment opportunities are destabilized as they appear and disappear. Workers are therefore forced to follow capital in their search for jobs. For example, NAFTA has contributed to reduced Mexican agriculture through enabling cheap food imports. Therefore, unemployed farmers have sought to migrate to the U.S in search for jobs (James and PatomäkiHeikki 346).

However, capitalism is believed to create happiness to the citizens of the countries or states in which it is practiced in a number of ways. It has benefits such as the creation of industrial working class as organized labor is created. In capitalistic economic states, there is urbanization where city formation takes place at relatively high rates and activities are geared towards creation of profits and accumulation of wealth. Capitalism is also associated with health improvements and population control brought about by lowered birth rates. Due to enhanced technological revolution, birthrates can be controlled and interventions to reduce mortality rates have been put in place. In some countries like U.S, capitalism has brought about improved lifestyles through increased productivity health care and creation

of employment (DaniRodrik 77).

Capitalism is also associated with the exponential growth of global markets as well as international trade. For example, the United States has signed free market agreements with nations of the world. Some of the countries include China, Singapore, Chile, Panama, Peru, Canada, Japan, among others. The prices of goods and services within the free market states are controlled by the trade participants and therefore offer a competitive ground for trade.

The global markets and international trade has played a major role towards development and improvement in international finance, transport and infrastructure improvement and timing of development.

Establishment and improvement of higher education systems have been evident in capitalistic economic systems. Due to the close ties and relations between capitalistic states, university exchange programs have emerged. For example students from a university in the United States exchange with student from a university based in Japan. The programs encourage multicultural interactions, international cohesion and capital movement. The programs also promote scholarships where students from one regions move into another region for academic purposes. That way, the students are able to share academic knowledge and backgrounds, integrate knowledge which leads to technological development and discovery. For example, often, governments from countries such as Korea, China, United States, United Kingdom, among others have been sponsoring students, especially those from third world countries to study in areas of science and humanities with a view to promote personal and national development.

Capitalism leads into financial growth of the countries where it is practiced. For example, countries like China, United States and United Kingdom have recorded very high economic growth rate through its investment in African poor countries in areas such as

oil and agriculture. These countries import raw agricultural goods from Kenya and Ethiopia at reasonable prices and process them at cheap cost and then sell the surplusback to the same African countries. Also, developed countries import crude oil from oil-rich Middle East and African countries including Nigeria and Libya, processes it at fair cost and sells it to the African countries.

Capitalism is a major source of happiness to businessmen as it leads into financial development. For example, rich businessmen and women trade across nations for finished products including textile products, electrical and electronics products, building products, among others. This leads into good business deals, personal development and hence happiness.

Capitalism promotes happiness through healthy lifestyles. For example, due to free trade agreements among capitalistic nations, there is free flow of information concerning health matters. Qualified healthy practitioners are able to share information with clients across the globe and if possible attend to the problems health-related issues among their clients. Free market encourages free movement of individuals including businessmen from one country to another.

The free movements encourage multicultural and social interactions which promote changes in lifestyles. For example, an Asian who travels to the United Kingdom will easily learn and copy healthy lifestyles which are practiced in the foreign country. Once he or she returns to the home country, he is able share the same lifestyles to the community and countrymen.
Trade involving pharmaceutical products between capitalistic states enhances health lifestyles. For example, the United States Europe and India are known to trade widely on preventive and curative drugs across the world. Capitalism therefore improves accessibility to pharmaceutical drugs and their associated services as they are being traded

in the free markets.

Constitutions of most nations and states have been highly influenced by capitalism. For example, the countries which have trade agreements with the United States tend to rely upon the United States’ constitution in the development and amendment of their constitution. Legislative bodies have established and amended constitution clauses touching on diverse areas to march with respective clauses of constitutions of other countries. This has promoted happiness as it eradicates oppressive and unforthcoming constitutions. However, amendment of constitutions based on other country’s constitution is a trick affair as countries and states share different economic, social and political backgrounds. For example, clauses legalizing marriage between people of same sex may be received with controversy among capitalistic nations and therefore, may not be adopted (Peter Glick 436).

Capitalism has led to the establishment of bills of rights. In aristocratic countries for example, basic human rights are highly suppressed. Rights such as those of speech and expression are not encouraged in most states. However, through capitalism, the free trade encourages the establishment of bills of rights as countries form bonds. This eventually results into happiness among the citizens of the participating countries as is victimization based on violation of the set bills of rights. This enhances lifestyles as people are able to respect the rule of law. Other aspects which promote happiness among the citizens in capitalistic economic systems include: career opportunities and equal rights for women, jobs in the political systems such as Governor, Senate or even President and ownership property including factories (Panitch and Sam 235).

Capitalism takes center stage in the promotion and creation of happiness in the citizens of the nations which practice this

form of economic system.Capitalism is a good economic system for the creation of wealth, profits and international ties. The system culminate into happiness through promoting gender equalities, improved worker’s rights and enhanced human rights including freedom for speech and expression. In democratic countries, markets usually do not function efficiently because they are controlled by supporting institutions. For example, there are strict courts to enforce contracts, there is stringent property rules to establish ownership, there is trading regulations for protecting buyers and sellers, there is standards which supervise and maintain financial stability, health, safety and environmental interventions which ensure compliance, there is compensation schemes for losers among others. All these are functions of the government and they tend to limit the extent and profitability in regularized markets. They also tend to limit the competition needed for a prosperous market.

Work cited

1. DaniRodrik, The Globalization Paradox: Democracy and the Future of the World Economy. New York: Norton & Company, 2011. Print.
2. Peter Glick, The World’s Water 2004/2005: A Biennial Report on Freshwater Resources, Center for Resource Economics. Washington D.C.: Island Press, 2004. Print.
3. Musacchio Aldo and Lazzarini Sergio G. Reinventing State Capitalism: Leviathan in Business, Brazil and Beyond. Cambridge: Harvard University Press, 2014. Print.
4. James Paul and PatomäkiHeikki, Globalization and Economy: Global Finance and the New Global Economy. London: Sage Publications. 2007. Print.
5. Mayfield Anthony, Economics, in his On the Brink: Resource Depletion, Debt Collapse, and Super-technology. Vancouver: On the Brink Publishing. 2013. Print.
6. Panitch Leo and Sam Gindin, The Making of Global Capitalism: the Political Economy of American Empire. London: Verso. 2012. Print.
7. Carsel, Wilfred."The Slaveholders' Indictment of Northern Wage Slavery". Journal of Southern History 6.4 (1940):
   

504-520.1940. Print.